Shares of Best Buy (BBY +1.58%) were rising in Monday morning trading after founder Richard Schulze and two of his former colleagues agreed to join the board of the consumer electronics retailer, whose fortunes Wall Street analysts are increasingly convinced are getting better.

Schulze earlier tried to take the Richfield, Minn., company private but was unable to attract sufficient financing. He left his post at Best Buy last year after failing to notify the board about an affair CEO Brian Dunn was having with a subordinate.

Schulze, however, has remained a major shareholder, and he's coming back as chairman emeritus. As per an existing agreement, he nominated former Chief Executive Brad Anderson and former Chief Operating Officer Al Lenzmeier to the board of directors. Morningstar analyst R.J.Hottovy told Reuters that Schulze's decision is good news and will save the retailer from a huge increase in its debt load that usually comes with a leveraged buyout.

In a press release, Schulze, who founded Best Buy in 1966, was complimentary to current CEO Hubert Joly. What role Schulze will play in managing the company remains unclear.

Joly's fan base on Wall Street continues to grow. Barclay's (BCS -3.63%) today raised its price target on Best Buy's stock to $28 from $20, citing increased confidence in Joly's ability to slash costs, among other reasons. The brokerage firm is now recommending Best Buy for the first time since 2007.

Stifel Nicolaus also considers the retailer a buy, and JPMorgan (JPM -0.55%) recently initiated coverage on the stock with an overweight rating.

Best Buy is trying to be more competitive on price to combat "showrooming," when consumers look at products at a retailer's bricks-and-mortar stores only to buy them later from an online business at a lower price. There are some signs of progress. Best Buy reported a 0.9% gain in same-store sales in the fourth quarter, its best performance in 11 months for this key metric of sales at stores open for at least a year.

Unfortunately, Best Buy faces some formidable competitors such as Amazon.com (AMZN -0.81%) and will continue to confront significant challenges. The company is not out of the woods by any stretch and won't be for a while, no matter if its founder is on the premises or not.